Fundamental view:

The US dollar initially fell during the course of the week and then picked up and formed a bullish candle. The US dollar rally formed after U.S. Federal Reserve led markets to bring forward the likely timing of a policy tightening. The yen pair portrayed a strong recovery after the previous day in May, with the US dollar benefiting from a volatile mood . Japan has restriction due to corona virus spread and related lockdowns.

Japan Consumer Confidence Index on 2nd August and Japan Markit Services PMI on 4th August created downtrend whereas US ISM Non-Manufacturing Employment on 4th August and US Unemployment Rate on 6th August created uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are Japan Adjusted Current Account, US JOLTS Job Openings at Aug 09, US Nonfarm Productivity at Aug 10, BoJ Corporate Goods Price Index monthly report, Federal Budget Balance at Aug 11, US Initial Jobless Claims, US WASDE Report at Aug 12 and US Michigan Consumer Sentiment at Aug 13.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.21% lower than the previous week. Maintaining high at 110.35 and low at 108.71 showed a movement of 164 pips.

In the upcoming week we expect USD/JPY to show a bullish trend. The currency pair is trading above the 100 Simple Moving Average and the MACD trades to the upside. A solid breakout above 110.80 may open a clean path towards 111.40 and may take a way up to 112.44. Should 109.16 prove to be unreliable support, the USDJPY may sink downwards 108.12 and 107.52 respectively. In H4 chart, Formation of falling wedge pattern indicates reversal of the trend creating prospects of a bullish trend Along with a bullish hammer formation braces our expectation.